Delay to Constructions Expensive for Reykjavík City Skip to content

Delay to Constructions Expensive for Reykjavík City

Reykjavík City has to pay ISK hundreds of millions (ISK 100 million = USD 1.2 million, EUR 0.8 million) in compensation for delay to a land-use plan to Valsmenn hf., the company in charge of developing Hlídarendi, the area belonging to Valur football club.

Reykjavík City Council recently signed an agreement with FC Valur and Valsmenn hf. on a development in Hlídarendi worth ISK 155 million (USD 1.9 million, EUR 1.3 million).

According to the agreement, the city’s construction committee at Hlídarendi will hand over its projects to Valur, Fréttabladid reports.

For every month that the plans are delayed, Reykjavík City has to pay ISK 10 million (USD 122,000, EUR 83,000) in compensation.

Chairman of Valsmenn hf. Brynjar Hardarson said the company has suffered considerable financial damages because of the delay to the agreement.

“The cost of our commitments have because of this [delay] surpassed ISK 2 billion [USD 24 million, EUR 17 million] and considering the interest rates that we live with the compensation does not cover the down payments,” Hardarson said.

While Reykjavík City does not live up to its part of the agreement, Valsmenn hf. cannot sell the rights to constructions in Hlídarendi and operations in the area cannot be completed.

“We haven’t been able to fulfill our commitments to the football club because of the delay,” Hardarson said.

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